Withholding tax processing

Withholding tax is typically a government requirement. The payer of income withholds or deducts direct tax from the payment and pays the tax to the government. Accounts payable withholding tax encompasses situations where amounts are held back from payments to the vendor and the payments are reported to the government.

Chile specifics

In Chile, taxes are withheld upon receipt of the invoice. When acquiring professional services, legal entities must withhold as a provisional payment, a percentage on the amount of payments that are made to services providers.

Withholding agents who acquire goods or hire services that are affected by the VAT subject changes must issue purchase invoices. Withholding agents must withhold, declare, and enter into tax coffers the percentage of established VAT. This is independent of the condition of electronic invoice that the seller may have of these products.

How Infor meets the requirement

This requirement is supported in FSM by recognizing the withholding tax on invoice creation point.

See Tax User Guide.